Renewable Energy Innovation and Governance in Wales: A Regional Innovation System Approach

Abstract

This paper draws on research commissioned to investigate the regional innovation system of Wales on green innovation, focusing on the renewable energy sub-sectors of wind, solar and biomass. It shows how many innovative firms operate within regional networks, cooperating and interacting not only with other firms such as suppliers, customers and competitors, but also with research and technology resource organizations, innovation support agencies, venture capital funds, and local and regional government bodies. The paper argues that within the region there is the presence of various renewable energy production platforms, usually based on core technologies (wind, solar, biomass, marine, etc.) at different levels of development. They involve a mix of established energy utilities and new sustainable energy businesses that are positioned at different levels within the renewable energy supply chain. The research shows that the regional government is playing an important role in supporting the renewable energy industry; nevertheless, more needs to be done to facilitate planning control, provide skills and create new demands for renewable energy that will further foster business growth and further strengthen the existing manufacturing base and innovation in Wales. The paper identifies some weaknesses in the Welsh energy innovation system, not least that energy is not a devolved responsibility and it argues that there is some scope for the Welsh Assembly Government to further investigate gaps within the green innovation supply chain and act on strengthening regional capabilities within the industry but also to support and investigate further opportunities for inward investment.

Notes

The UK comprises the nine regions of England, Scotland, Wales and Northern Ireland. Wales, Scotland and Northern Ireland have devolved administration and elected assemblies.

Lines of investigation concerned the internal and external networks of relationships between public R&D institutions, governmental actors and other innovation support organizations; the extent of inter-firm and firm–agency interactions, policy learning and networking; policy success and uptake of policy instruments; and barriers, problems and future policy ideas.

Since June 2009 Department for Business, Innovation and Skills.

The report distinguishes between those companies whose main business is purely in the LCEGS market (specialist) and those who supply into LCGES markets but are classified in other sectors such as engineering (supply chain). For example, in the wind energy sub-sector, manufactures of wind turbines would be classed as specialist wind energy companies, whilst manufactures of the gear boxes that go into the turbines are classified as engineering, but in reality are part of the wind energy supply chain.

Following the 2009 closure of the Vestas turbine blade manufacturing facility on the Isle of Wight, which represented the only UK-based facility producing components for the wind turbine industry, most of the turbines and components need to be imported into the UK. Nevertheless, there are hundreds of companies that are still involved in the supply of some components, such as blades, gearboxes and generators, and businesses offering specialist services such as offshore construction vessels, wind speed monitoring, project development advice and financing expertise in the UK.

Major structural changes have taken place in the industry in recent years, bringing in new companies. The increased size of wind farms, growth of business at a rate of approximately 30% per annum, improved technology and improved turbine availability have all allowed the wind energy business to attract players in the conventional power and energy industry, with entrants such as Shell, General Electric and Siemens.

In Germany, for example, the pattern of development has often been through individual projects financed from a fund in which a number of private investors take out shares. In Spain, by contrast, a single financing arranged by a leading electricity company in 2001 was for more than 1000 MW of capacity.

In 2004, “Sharp Manufacturing”, who is the world's largest manufacturer of solar PV cells and modules, launched its first PV manufacturing plant in Wrexham to support the growing PV market across Europe. EPOD Solar Wales (formerly ICP Solar), a company with 5 MW panel manufacturing facility in South Wales, specializes in amorphous silicon technology and it 's the only thin-film PV manufacturer in the UK.

Madryn's support was also fundamental for the set-up and running of BML Biofuels (a farm-based bio-diesel plant in North Wales), the first plant in Wales—and only the second in Britain—to extract oil by cold pressing oilseed rape, that will produce 1.3 million litres of bio-diesel every year (3600 l a day) as well as 2500 tonnes of high-protein feed pellets for livestock.

United Aerospace is no longer supplying the carbon glass fibre; they are provided from a Czech company based in Bratislava).

A review of this is provided in De Laurentis and Cooke (2009).

The development of new industries and technologies in some European countries has historically been closely tied to the development of new domestic markets. Governments and governmental agencies have used public technology procurement (PTP) to create initial markets, stimulate domestic innovation to overcome market failures (see, for instance, the case of Sweden PTP initiatives in Edquist & Hommen, 2000).

See, for instance, the low carbon zone in the Heads of the Valleys and the Strategic Energy Performance Investment programme (Arbed) in Wales http://wales.gov.uk/topics/environmentcountryside/energy/efficiency/arbed/?lang=en.